If you’re in the product space, you have probably heard the term DAU thrown around in conversations or meetings. DAU is a product metric that means “daily active users.”
In this article, we’ll talk about what daily active users (DAU) mean, what a good ratio DAU is, how to calculate it, the factors that affect it, and more.
Table of contents
- What are daily active users (DAU)?
- What is a good ratio for daily active users?
- How to calculate DAU
- Factors that affect DAU
- How to improve DAU and increase user engagement
- Best practices for tracking and analyzing DAU data
What are daily active users (DAU)?
DAU is the total number of unique users who visit or interact with an app or platform daily. Examples of interactions could be a user clicking a tab on a website to search for more information, a user clicking to watch a video, a user commenting, etc. Interactions will vary depending on the type of product.
The DAU on your platform is not the same as the DAU percentage. It is very easy to miss but they are two very unique metrics — to get your DAU percentage, you need your total DAU (the number of unique visitors) first.
Your DAU percentage is the ratio of unique visitors to total visitors across a period of time. DAU percentage is also very similar to stickiness, a metric you may have heard of before. Stickiness — the DAU to monthly active users (MAU) ratio — is a measure of a company’s monthly user base activity. These metrics are important to track because it is a key indicator that users engage with your product — be it an app, website, or platform frequently, periodically, or not at all.
The stickiness ratio is often considered a truer measure of engagement than standalone metrics like DAU or MAU, as it shows how many users return daily relative to the total number of monthly users.
DAU (and DAU percentage), depending on the app, platform, or business can vary drastically — no number fits all. Having a high DAU or DAU percentage for some platforms with ads can mean more revenue. For another, a high DAU could mean that users are loyal to the service being provided. It could be that a high DAU indicates that users love the content they can see and engage with it.
Having a low DAU could be an indicator that the content is not capturing the interests of users, it’s not helpful, the user experiences are bad, and more — the list goes on. To fix this, the teams involved can pay attention to enhancing the user experience, creating targeted marketing campaigns, and making sure to produce valuable and engaging new content.
The significance of DAU lies in its ability to shed light on user retention and engagement levels, which can be used to evaluate the growth and success of a product. companies may increase engagement, retention, and platform performance by monitoring DAU to gain a better understanding of user behavior. DAU is quite helpful for spotting trends and major or minor changes in user behavior that have a great impact.
What is a good ratio for daily active users?
Although a good DAU can vary greatly depending on the sector, type of application, and target market, there is no general standard for what qualifies. Average DAUs reduce outliers and offer a broader perspective on involvement, providing a more helpful number to study. In general, across all industries, a DAU percentage of less than 10 is considered poor.
Nonetheless, the following are broad standards for many business sectors and application types:
Social media
These platforms often have the greatest DAUs, with some of the most well-known ones, like Meta, having over 2 billion daily active users. A good DAU or stickiness percentage for social media apps would be around 20–30 percent due to the generally high level of engagement, but it really varies by the platform.
Because of the range of social media app success, it’s important to look at stickiness as a metric rather than pure DAUs when comparing platforms. Smaller social media platforms can still be regarded as successful even if their raw number of daily active users is significantly smaller than a competing app.
Gaming apps
Games have large DAUs, with some of the most well-known titles boasting millions of daily players. For example, the most downloaded Android game was Subway Surfers, which had over 30.57 million daily active users. In terms of stickiness, a ratio of about 10–20 percent is considered good for gaming apps.
E-commerce
E-commerce platforms typically have lower DAU numbers than other platforms. Depending on the size of the platform and the type of products or services offered in terms of DAU percentage, 5–10 percent is considered good. These rates may fluctuate greatly depending on the season, with peaks usually around the ending months of the calendar year.
Business and productivity applications
Business and productivity applications, such as project management or collaboration tools, may have lower DAUs than other types of applications, but a DAU ratio of 5–10 percent can be considered good.
It is important to note that these benchmarks are not set in stone and can vary depending on the specific goals and objectives of the platform. It is also important to consider other metrics, such as retention rate and user engagement, alongside DAU to get a more comprehensive understanding of the platform’s performance.
How to calculate DAU
To get your DAU, you need to count the number of users who perform unique actions or a unique (defined by you) within a 24-hour window. For example, a user may visit your platform and drop off — this user can not be classified as a daily active user.
It can become challenging to what a unique visitor is depending on how the activity they perform is classified. You must specify the definition of an active user — the frequency of unique engagements you wish to track — and gather data using an analytics tool before you can calculate DAUs.
When you have this information, you can calculate your DAU percentage using the formula below:
DAU percentage is calculated by taking the number of active users who have made unique interactions within a specific time frame and dividing it by the total number of active users within the same time frame. Multiply the result by 100 to get the daily active users ratio.
The calculation for stickiness, as we’ve introduced before, is the ratio of daily active users across one month. The only difference between DAU percentage and stickiness is that stickiness uses this 30-day period — your DAU percentage, on the other hand, can be within any timeframe:
Factors that affect DAU
Many factors affect DAU, including industry, user behavior, seasonality, user retention, and more. We’ll go into detail below.
Industry
The industry in which a product or platform operates can have a significant impact on its DAU. For instance, because users engage with interactive products and platforms like social networking, gaming, and entertainment more frequently than e-commerce platforms, they tend to have higher DAUs.
User behavior
Another significant factor that affects DAU is user behavior. For instance, some users may only use a platform a handful of times throughout the week or even a day, while others may do it more frequently. The platform’s features and content can affect DAU by changing user behavior.
Seasonality
Seasonality may also affect DAU, depending on the type of product. For example, during special events or holidays like Christmas, Eid, Hanukkah, and more, some users may be spending time with friends and family, making them less likely to interact with apps and platforms.
On the flip side, e-commerce platforms in particular see a large uptick in DAU during the busy holiday months. If you live in the United States, it’s no surprise that November and December are big shopping months — ultimately leading to heightened DAU for many big e-commerce platforms.
It’s important to think about the context around fluctuations in DAU, as there may be an element of seasonality to consider.
User acquisition
Product-led growth is key to driving and preserving a high DAU. When the product is advertised or in the middle of substantial marketing efforts, new users are drawn in more quickly. Depending on the level of effectiveness, the users can become loyal to the product.
User retention
You’ve acquired the users, so now what? For a platform to keep its DAU at a high level, user retention is essential. A platform’s DAU may gradually decline if it is unable to keep users coming back. Platforms must therefore constantly provide fresh and interesting content, improve their user interface, and add new features to better serve their users and be better than competitors in the market.
How to improve DAU and increase user engagement
There are various ways to up your DAU numbers and increase engagement, to avoid a long list, we would focus on three major areas;
Know your users
You must get a deeper grasp of your offering to define your target market and locate your ideal consumer. Knowing what your users want from your product or service will help you better understand their activities throughout the user journey.
As a result, your ideal user will be more satisfied and more likely to stay a customer if you can provide them with solutions and products that are specifically designed to satisfy their demands.
Focus on smart retention
Retention requires offering outstanding user assistance and making your software accessible to users so they will keep using it. It could take customers some time to completely comprehend and use all of your app’s capabilities after they download it.
A recurring email reminder can help keep the app top-of-mind and sustain a strong DAU rate since onboarding users is an ongoing process.
It can also be helpful to greet new app users and give them the information they need by sending timely emails with pertinent information. Conducting retention analysis and segmenting your user base will further help improve user targeting and produce a more individualized experience.
Pay attention to the user experience and complete journey
A good strategy to improve the overall experience of your product is deep linking. Deep linking, as used in the context of mobile, refers to the process of directing consumers to specific in-app content from any location. It ensures a consistent and seamless flow and makes it possible for your users to go through their user journey by connecting your siloed channels into one coherent user experience platform. This process boosts competitive advantage in addition to boosting user loyalty.
Paying careful attention to the complete user journey is essential when looking to increase engagement. Taking time to study and understand user routines and preferences will reveal opportunities to make adjustments and improvements to the overall user experience. Studying user interactions and general behavior by regularly reviewing the data, as well as intentional marketing and advertising efforts, are crucial to strengthening user connections and loyalty. Doing this is very important, as it is likely to help increase company revenue over time.
Best practices for tracking and analyzing DAU data
There isn’t a predetermined high or low figure for DAU, but you can establish benchmarks based on past performance. For instance, you’ll know you’re on the right track if your business typically sees 500 daily active users and then experiences a large increase to 5,800 daily active users in one day.
It’s an indication of development and that your product has generated a sense of “stickiness,” turning it into a crucial, regular tool for a company.
Do note that a concerning symptom of probable customer churn is a daily declining DAU, which can signify a lack of interest in or interaction with the platform. You can establish a stronger rapport with users and lower the possibility of churn by learning what they use your platform for, where they are having problems, and offering to help when necessary. You can improve the user experience, which will increase customer loyalty and lower the churn rate, by anticipating demands and resolving problems before they occur.
A good example of a product with a fantastic growth strategy is Slack. With more than three million paying members, Slack is the fastest-growing B2B SaaS firm in history. During the beta phase, the company adopted a freemium business model, enabling enterprises to request access to the platform and leveraging customer feedback to improve the offering.
As soon as it was introduced, Slack concentrated on dependable and long-lasting methods (that targeted their user experience and marketing) of attracting new users and improving the platform’s usability to keep them.
Conclusion
It is important to note that if you are trying to evaluate the effectiveness and engagement of your product or services, DAU is a critical performance measure. You can spot trends, patterns, and opportunities for change to improve user experience and boost retention rates by monitoring and analyzing DAU. Just remember that it is not a reliable metric to consider alone.
Featured image source: IconScout
The post What are daily active users and what is a good DAU? appeared first on LogRocket Blog.
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